Financial Daily from THE HINDU group of publications
Wednesday, Jun 11, 2003

Port Info

Group Sites

eWorld - Software
Industry & Economy - Health

Lagging behind

L.N. Revathy

The Indian healthcare system needs to play catch-up to make a mark in the global arena.

SEETHA was just over 45, when medical experts diagnosed that she suffered from arterial blocks that needed immediate attention. Scared though she was of surgery, she was keen to get immediate relief. However, she decided to get a second opinion about her condition before going ahead with the procedure and also tried to ascertain the healthcare spend.

She made a comparison of the treatment costs at different private hospitals before choosing a place where the costs were comparatively low. But the task was not easy. She had to move around as there was no standardisation of treatment protocols and quality, either through registration or accreditation, no way of controlling insurance claims as prices varied, no IT infrastructure, a huge base of small practices that limited rapid networking etc.

The private healthcare providers, though numerous, were fragmented along a variety of delivery models, with wide variation in the quality and quantity of diagnosis and treatment. Also, the scale of government spending was pretty low compared to developing countries and the expenditure was inequitable as the spend mostly benefited the richer segments of the population.

Expenses apart, Seetha began to think not just about the medical innovations that could possibly improve her health in the post-operative years but the increased inequality of access to quality medical care.


A CII-McKinsey report has assessed the Indian healthcare system to be seriously under-performing. The report suggests that to improve its performance and meet India's future healthcare needs more effectively, the Government and industry will need to take actions that could increase investment and employment in healthcare and make high-quality care more affordable and available to all.

Changing demographics and disease profiles, plus the rising treatment cost, are expected to cause the spending on healthcare delivery to more than double in the next decade.

While this is so on the domestic turf, a Nasscom (National Association of Software Services Companies) survey on the US healthcare industry shows that the industry's IT spend would clock $40 billion in 2003, up by 7 per cent from 2002.

In a sign of technology's increasing role in healthcare, 86 per cent of business leaders at US hospitals view their IT organisations as a source of business innovation.

The Health Insurance Portability and Accounting Act (HIPAA) compliance, quality mandates, physician connectivity and healthcare consumerism have all fuelled the demand for hardware and software. But one of the biggest IT laggards that the industry now faces is government regulations, watchdog groups and increased competition — all of which have motivated companies to catch up and improve the efficiency of healthcare companies' supply chains and financial processes.

Depending on where they are located, healthcare companies have also begun to sense the local pressures that could cut into their IT budgets. To cut network costs and extend access to doctors' offices, hospitals (out there) are mirroring the rest of the market.

In 2001, only 33 per cent of the hospitals surveyed had active or completed Virtual Private Networks (VPN) rollouts, while the number has more than doubled this year.

Though such VPNs have still not taken off in a big way in our country, smaller clinics seem to evince more interest in implementing such systems as they perceive enormous saving on cost, says Rangaswamy of Consolidated Cybernetics.

While the number of hospital applications keeps soaring — lab systems, charge capture, scheduling, patient access, clinical decision support, physician portals and Web-based medical imaging just for starters — the integration has become the devil-in-the-details.

Rangaswamy, however, points out that a number of hospitals (immaterial of size) were fully equipped and the patients loaded after screening. `Why should this happen? Why should each of them invest on costly gadgets? If instead, these clinics or hospitals were networked and could share information about a patient, a lot of recurring expenditure can be avoided. Quality and standardised treatment can be made available at affordable rates... there is much more to it than meets the eye," he says.

The Nasscom report points out that even in the US, not all doctors embraced such technology, despite the productivity improvements that such type of systems offered.

`They were not enthusiastic about one innovative effort — computerised drug systems, a key technology that healthcare companies are under pressure to adopt. Such systems require doctors to abandon writing prescriptions, something that many doctors find difficult to give up', the study states.

For healthcare companies, IT is critical for eliminating certain errors, improving patient care and making their business more efficient.

While technology has undergone a total transformation in the last decade or so, what remains unchanged is `affordable and quality healthcare for all'. The country has forged ahead on the technology front, but is definitely lagging behind in healthcare IT spending.

Article E-Mail :: Comment :: Syndication

Stories in this Section
A rich haul

Up against odds
The message is clear
Lagging behind
No smooth passage
Sowing research
Multimedia compilers
Tip off
Target the threesome
Time for insight
It's enough to be perfect enough

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |

Copyright 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line